Replacement of main residence / share value under £40k

[clueless0707]

Hi,

I would really appreciate any thoughts on our situation please. So my husband is purchasing a property, just waiting for an exchange date, so completion expected July 2017. He disposed of his interest in his previous marital home in 2013 and has rented since this.

I also have a previous marital home, which is still jointly owned by myself and my ex-husband, we've had to keep it as its in negative equity. This property has been rented out until around 12 months ago when my husband and I moved back in to save the money for the deposit for the new purchase.

So my questions are as follows....

Does the disposal of my husbands previous property count in the replacement of a main residence? (Despite the fact we are living in my property)

If not...

How is the value of my property determined? The market value is approx. £80k of which I own 50% so my share is about £40k. Should I get it valued to prove this? I'm guessing that values quoted from estate agents would be approx. £75 - £85k the house opposite recently sold for £80k but it has 3 bedrooms and mine has 2. I'm just a bit worried to rely on the value as its so close to the maximum.

The property we currently live in, may go back to being a rental, but will probably be sold once my husband has renovated the new property.

Any advice appreciated!

[maths]

The purchase by your current husband alone will not attract the 3% SDLT charge as he is replacing his earlier sole residence.

You are disposing of nothing and acquiring nothing.

[SDLT Geek]

I disagree with maths. Although your current husband is buying alone, for surcharge purposes you are treated as if you are a joint buyer with him.

It sounds as if you cannot rely on his disposal as you had not lived in that house.

So you seem possibly caught, subject to the £40,000 point.

Will your former home be sold soon, or will you at least dispose of a major interest in it?

[maths]

Overlooked fact that you hadn't lived in current husband's property as a residence but only lived in former matrimonial home albeit with current husband for last 12 months or so.

However, if your interest in the property you own 50% of is valued at below £40,000 then 3% charge won't apply to the purchase.

[SDLT Geek]

Yes, I agree with maths now. maths, do you think it would be legitimate to apply a discount for a part share if a valuer said that would be normal? Valuers sometimes quote a 10% discount for a share.

[maths]

In short, yes.

If X owns 50% of a property and markets that 50% then inevitably a potential purchaser would not pay X 50% of the value of the whole house.

As you say, typically discounts of between 5% and 10% apply.

[SDLT Geek]

So if you can obtain a valuation of your half share of your former matrimonial home at under £40,000 (allowing for any discount the valuer feels appropriate) you will escape the surcharge.

Otherwise it will be due, but with the ability to reclaim it if your old house is sold within 3 years.